A trust is an institute of Anglo-Saxon origin, introduced into Italian law by Law no. 364 dated 16 October 1989, by which the Italian state ratified the Hague Convention dated 1 July 1985 concerning "the law applicable to trusts and their recognition."
The Italian legal system has not yet adopted its own internal law to fully govern the institution under the statutory aspect; therefore, the institution of an "internal" trust, characterised by the Italian residence of the trust entities and assets subject to the trust relationship must necessarily conform to the provisions of the Convention and with the provisions of a foreign law.
From a fiscal point of view, the institute received rules and regulations with the Law no. 296 dated 27 December 1996 (also known as the "2007 Finance Act").
Through the establishment of the trust the subject transfers the ownership of some property to the trustee, who must manage them according to the provisions of the trust. Through the specific act of transferring goods in favour of the trustee, the settlor is stripped of ownership of the transferred assets, which therefore no longer part of the assets of the settlor and become part of the segregated assets constituted by the Trust Fund. In particular, the assets transferred by the settlor to the trustee no longer belong to the settlor, but to the trustee, in his specific quality.
Thus, between the settlor and the trustee, a relationship of trust must exist.
The property forming part of the Trust Fund can not be attacked by any creditors of the Settlor, because, following the transfer to the trustee, they are no longer found in the assets of the Settlor himself. Nor, on the other hand, can the assets included in the trust fund be attacked
The subjects of the trust are the Settlor, the Trustee the beneficiaries and the Guardian
The Settlor is the person who establishes the trust, through the signing of the trust and transfers the property to the trustee to enable them to become part of the Trust Fund
The Settlor, from the moment that the trust is established, does not hold any right or any power over the trustee; but this does not exclude that the Settlor reserves in the establishing of the deed, a managing role over the trustee's activities.
The trustee is the owner of the Trust fund, which may have provided fully in accordance with the provisions of the act establishing the trust.
The role of trustee of a trust can be filled by anyone who is able to act. Some legislation allows for the professional exercise of the office of trustee only to entities, usually companies, registered in a special register under the control of a public authority.
The determination of the remuneration of the trustee to carry out the planned activities in the trust is left to negotiation between the Settlor and trustee himself. The trustee, in practice, is also entitled to receive reimbursement of expenses incurred in carrying out office.
The appointment of the trustee is normally done in the establishment of the trust. The trustee is appointed by the settlor; the power to appoint the next trustee (additional, or replacement of the trustee appointed in the trust) can be attributed, in the establishment of the trust itself, to other entities of the trust (for example, the Guardian,) or to third parties.
The beneficiaries may be defined as subjects in favour of whom the trustee conducts his business in accordance with the provisions of the establishment of the trust and to whom the trustee attributes the Fund of the trust at the end of the term of the trust itself. Certain rights and actions are reserved.
The settlor can immediately identify the beneficiaries, or be limited to indicating the category of beneficiaries, in which the trustee will choose, at any given time, the beneficiaries of the trust;
The Guardian is a possible figure and not necessary in a trust. The main function of the Guardian is to oversee the work of the trustee in the interest of the beneficiaries or the fulfillment of the purpose (in a purpose trust). Certain powers, dispositions, and administrations may be reserved for the Guardian,
Depending on the operational practices, the constituent act is a programmatic act, devoid of systems, in which the Settlor
The establishment of the trust is different to the dispositions with which the Settlor, after the signing of the trust, will transfer movable and immovable property which will be included in the Trust Fund to the trustee and in relation to which the trustee will carry out the tasks assigned to him in the trust. The trust deed will alternately be a public deed or private authenticated deed, while individual acts of transfer of assets to the trustee will have the form required by law for the transfer of that particular asset.
The Italian legal system although not governing the trust as an institution recognises and protects the reasons of those third parties who may be prejudiced by an institution of trusts and in particular those of the heirs of the Settlor and those of creditors in case of insolvency. In particular, in the event that the transfer of one or more assets to the trustee affect the reasons for the creditors of the Settlor, the same may initiate proceedings to revoke pursuant to art. 2901 of the Civil Code. or the bankruptcy revocatory action (for the case where the Settlor is an entrepreneur or a company).